Eastern Asia is the sixth largest cryptocurrency economy in the world this year, accounting for 8.9% of global value received between July 2023 and June 2024. This, according to an update from Chainalysis.
Chainalysis noted that the region received “more than $400 billion in on-chain value during the same time period.”
Eastern Asia’s share of cryptocurrency transaction value “has remained relatively stable during the time period studied with no significant fluctuations.”
Similar to all other regions in this report, centralized exchanges are “the most popular service category in Eastern Asia, accounting for 64.7% of cryptocurrency value received.”
Chainlaysis also mentioned that most of this activity was driven “by large transfers suggestive of institutions and professional investors.”
Notably, Chainalysis pointed out that Eastern Asia accounts “for the largest share of professional-sized transfers compared to any other region studied in this report.”
There is a stark contrast between the services “used by professional investors and those used by institutional investors.”
As revealed by analyzing available data, Chainalysis noted that professional investors primarily used centralized exchanges (CEXes), “whereas institutional investors used decentralized exchanges (DEXes) and other decentralized services (DeFi).”
Chainalyiss speculate that institutional investors “often seek investment strategies that capitalize on market inefficiencies; DEXes typically offer more arbitrage opportunities than CEXes due to their diverse asset coverage.”
Eastern Asia includes five of the 50 highest grassroot “adopters of cryptocurrency around the world: South Korea (19), China (20), Japan (23), Hong Kong (29), and Taiwan (40). Below, we’ll explore in detail what is driving crypto adoption in these countries.”
South Korea leads the Eastern Asia region in terms “of cryptocurrency value received, at approximately $130 billion during the time period studied.”
Since the first quarter of 2023, South Korea’s share “of transaction value in Eastern Asia has also been steadily increasing.”
Chainalysis says that they spoke to a leader at a top South Korean crypto exchange who speculates that several factors have contributed to this growth:
“Mistrust in traditional financial systems has led investors to seek out cryptocurrencies as alternative assets. The public’s perception of crypto as a viable investment option has been further solidified by adoption of blockchain by major corporations like Samsung and large enterprises in the region that are working to enhance operational transparency and efficiency.”
A leader at another South Korea-based exchange provided us with more insights into these trends:
“As a top IT nation, the Republic of Korea provides easy access to digital asset trading through mobile apps and PCs. The general population’s interest in crypto has grown, especially after Bitcoin surpassed $70,000 in January 2024.”
This uptick in trading activity is evident in numerous places — “more specifically with altcoins and stablecoins.”
Altcoins, which South Koreans mainly use to trade “with the Korean Won (KRW), have accounted for higher outflows to global exchanges than any other crypto asset.”
The increase in stablecoin outflows beginning “in December 2023 shown in the below chart coincides with the USDT listings on major Korean exchanges, such as Coinone and Bithumb.”
Stablecoins accounted for more than 40% of total value “received by Hong Kong each quarter; this will likely grow as the Hong Kong Monetary Authority (HKMA)’s regulatory framework comes into force, as regulated stablecoins will be permitted for offering to retail investors in Hong Kong.”
